NEW DELHI: A recent study by the Sino-Russian Laboratory for Assessing the Consequences of Intercountry Trade Wars has revealed that the British, German, and French economies would be significantly impacted if their trade ties were cut off without the possibility of parallel imports. In contrast, the US, Russian, and Chinese economies could withstand a full trade blockade with relatively minimal damage.
The research, conducted in early 2024 at China’s National Supercomputing Center, tested the resilience of 19 global economies to large-scale economic sanctions using mathematical modeling.Analysts assessed the direct gross domestic product (GDP) losses each country would suffer if faced with a complete trade blockade without the option of parallel imports, a Russia Today report said.
Key findings
The study revealed that while all countries would see economic contraction under such a scenario, some would be hit harder than others. The German economy would be the worst affected, contracting by 8.1%. Other significantly impacted economies include South Korea (down by 7.9%), Mexico (7.2%), France (7%), Türkiye (6.6%), Italy (6%), and the UK (5.7%).
In contrast, Russia would be among the three most resilient countries, with its economy shrinking by no more than 3.5%. China would see a 3.1% decline in GDP, while the US would experience a 2.3% drop.
The study also indicated that the economies of Australia, Indonesia, and Japan would contract by 3.7-3.8%, making them less vulnerable to trade sanctions compared to India, Brazil, and Canada, which would see GDP declines of 4%, 4.2%, and 5.5%, respectively.
Analysis of resilience
Analysts attributed the resilience of the American, Chinese, and Russian economies to their Composite Index of National Capability, which includes significant natural resources, human capital, scientific prowess, and military potential.
Stanislav Murashov, Chief Economist at Raiffeisenbank, commented on the findings, saying, “The winner is the one who, in general terms, geared up for [restrictions] by localizing their production, or someone who will be able, for example, to abandon some imported components, parts, raw materials, equipment. Judging by the study, a possible thesis is confirmed that Europe is more reliant on the global market than China, the US, and Russia.”
Russia’s economic performance
Despite being subjected to a wide array of international economic sanctions due to the Ukraine conflict, the Russian economy has shown resilience. It initially contracted by 1.2% in 2022 but posted growth of 3.6% last year. Preliminary estimates for the first quarter of 2024 indicate a further GDP increase of 5.4% year-on-year. The International Monetary Fund projects the Russian economy to expand by 3.2% this year, outpacing several major Western economies, including the US (2.7%), UK (0.5%), France (0.7%), and Germany (0.2%).
The research, conducted in early 2024 at China’s National Supercomputing Center, tested the resilience of 19 global economies to large-scale economic sanctions using mathematical modeling.Analysts assessed the direct gross domestic product (GDP) losses each country would suffer if faced with a complete trade blockade without the option of parallel imports, a Russia Today report said.
Key findings
The study revealed that while all countries would see economic contraction under such a scenario, some would be hit harder than others. The German economy would be the worst affected, contracting by 8.1%. Other significantly impacted economies include South Korea (down by 7.9%), Mexico (7.2%), France (7%), Türkiye (6.6%), Italy (6%), and the UK (5.7%).
In contrast, Russia would be among the three most resilient countries, with its economy shrinking by no more than 3.5%. China would see a 3.1% decline in GDP, while the US would experience a 2.3% drop.
The study also indicated that the economies of Australia, Indonesia, and Japan would contract by 3.7-3.8%, making them less vulnerable to trade sanctions compared to India, Brazil, and Canada, which would see GDP declines of 4%, 4.2%, and 5.5%, respectively.
Analysis of resilience
Analysts attributed the resilience of the American, Chinese, and Russian economies to their Composite Index of National Capability, which includes significant natural resources, human capital, scientific prowess, and military potential.
Stanislav Murashov, Chief Economist at Raiffeisenbank, commented on the findings, saying, “The winner is the one who, in general terms, geared up for [restrictions] by localizing their production, or someone who will be able, for example, to abandon some imported components, parts, raw materials, equipment. Judging by the study, a possible thesis is confirmed that Europe is more reliant on the global market than China, the US, and Russia.”
Russia’s economic performance
Despite being subjected to a wide array of international economic sanctions due to the Ukraine conflict, the Russian economy has shown resilience. It initially contracted by 1.2% in 2022 but posted growth of 3.6% last year. Preliminary estimates for the first quarter of 2024 indicate a further GDP increase of 5.4% year-on-year. The International Monetary Fund projects the Russian economy to expand by 3.2% this year, outpacing several major Western economies, including the US (2.7%), UK (0.5%), France (0.7%), and Germany (0.2%).
Source Agencies
